Fri, Jun 22, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund assets up by $3.4bn in September

Tuesday, November 13, 2012
Opalesque Industry Update - BarclayHedge and TrimTabs Investment Research reported that the hedge fund industry took in $3.4 billion (0.2% of assets) in September, building on a $7.7 billion inflow in August. Based on data from 3,004 funds, the TrimTabs/BarclayHedge Hedge Fund Flow Report estimated that industry assets stood at $1.8 trillion in September, down 25.8% from the June 2008 peak of $2.4 trillion.

“The hedge fund industry saw net inflows for the second month in a row in September, which was a notable improvement from earlier this year,” said Sol Waksman, founder and president of BarclayHedge. “Year-to-date outflows shrank to $1.1 billion in September from $4.5 billion in August.”

While the flow picture is improving, the hedge fund industry continues to underperform popular benchmarks, gaining 1.8% in September while the S&P 500 rose 2.4%. For the first nine months of 2012, the industry earned a 6.1% return while the S&P 500 rose 14.6%. The 12-month spread is even wider: The hedge fund industry gained 7.8% from October 2011 to September 2012, while the S&P 500 rose 27.3%.

In a separate research note, TrimTabs reported that when ranked by performance, the top 10% of hedge funds returned a median 27.8% from January 2011 through September 2012, substantially outdistancing the S&P 500’s 14.6% rise, while the bottom 10% of all funds lost 25.6%. The top-performing funds also attracted significant inflows from hedge fund investors.

“The top 10% of best-performing funds attracted more than $10 billion in net inflows, while the bottom 10% of funds saw outflows of $6.4 billion,” said Charles Biderman, founder and CEO of TrimTabs. “The hedge fund industry had net inflows of $49.1 billion from January 2011 to September 2012, which leads us to believe the top funds accounted for 21.4% of the hedge fund industry’s inflows.”

The Hedge Fund Flow Report noted that over the past 12 months, Equity Long Only funds earned a 15.2% return, the best performance among the 13 major hedge fund categories that TrimTabs and BarclayHedge track. Despite outperforming the hedge fund industry by more than seven percentage points, these funds saw outflows worth $4.1 billion.

“Given that the top-performing equity hedge fund categories cannot seem to outperform a low-cost equity index fund, it’s no surprise that investors are avoiding the higher fees of equity hedge funds,” Biderman said.

Biderman noted that hedge fund investors seem to be avoiding risk across the board, settling for middling-to-low returns. “All 13 hedge fund categories had positive returns in the past 12 months,” Biderman said, “but only the top three — Fixed Income, Multi-Strategy, and Macro — had net inflows.” This caution yielded lower returns: 8.3% for Fixed Income, (5th of 13), 3.8% for Multi-Strategy (11th), and 3.6% for Macro funds (12th).

Among the eight global regions tracked in the report, Continental Europe funds had the highest inflows in September at 1.5% of assets, while Canadian funds had the highest y-t-d flows (-0.6% of assets) and Japanese funds had the strongest 12-month flows (1.4% of assets). All eight regions posted gains in September, and seven posted y-t-d and 12-month gains. Latin American funds had the strongest y-t-d outflows at -11.9% of assets. “As we’ve seen for the past couple months, hedge fund investors appear to be betting on a rebound in euro-denominated securities,” said Leon Mirochnik, Vice President at TrimTabs.

Meanwhile, the October 2012 TrimTabs/BarclayHedge Survey of Hedge Fund Managers found that while hedge fund managers were most likely to be neutral on the S&P 500 for November, bearish sentiment dipped to a 12-month low. Conducted in late October, the survey of 73 hedge fund managers also found that most see less than a 50/50 chance of a recession in Q1 2013 in response to who wins the U.S. presidential election.

Press release

bc <>

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Paper: The performance of stocks actively pitched by hedge funds[more]

    Using a novel dataset drawn from investment conferences from 2008 to 2013, I show that hedge funds take advantage of the publicity of these conferences to strategically release their book information to drive market demand. Specifically, hedge funds sell pitched stocks after the conferences to ta

  2. North America - US fundraising for special purpose acquisition vehicles hits record this year[more]

    From AFR.com: Special purpose acquisition vehicles (spacs) are hitting the US market at the fastest rate on record, attracting the likes of Goldman Sachs and hedge fund investor Daniel Loeb for the two largest such deals in 2018. Spacs have raised $US4.5bn so far in 2018, the largest amount fo

  3. Investing - Man Group and AQR try to take aim at private equity industry, Hedge funds poised to be winners in AT&T-Time Warner deal[more]

    Man Group and AQR try to take aim at private equity industry From FT.com: The popularity of private equity investments has prompted asset managers such as Man Group and AQR to devise strategies that aim to replicate PE returns but at a much lower cost to investors. Both companies a

  4. News Briefs: David Stemerman's hedge fund holdings shrank before his run for governor, nvestment manager TSW triggers succession plan, Alan Howard joins Peter Thiel investing in Cologne-based fintech startup[more]

    David Stemerman's hedge fund holdings shrank before his run for governor But the U.S. holdings of Stemerman's Greenwich hedge fund, Conatus Capital, shrank from $2.6 billion at the apex to just over $1 billion before he announced his move into politics. (Hartford Courant) Inv

  5. British Empire: Pershing's 23% discount 'unsustainable'[more]

    From Citywire: The wide discount on Pershing Square Holdings (PSH) is 'unsustainable' and puts star hedge fund manager Bill Ackman under pressure, says British Empire (BTEM). Pershing is the third largest holding in the £850 million British Empire trust, managed by Joe Bauernfreund, which sp